GOVT TO MAINTAIN EXPENDITURES FOR MINISTRIES

By Andi Abdussalam

Jakarta, Jan 13 (ANTARA) - The government has decided to maintain the ministries and state institutions' expenditures despite changes in the assumptions of the state budget for 2009.

        "The government will maintain the expenditures of ministries and state institutions worth Rp322.3 trillion," Finance Minister Sri Mulyani Indrawati, who is also acting coordinating minister for economic affairs, said after cabinet ministers' meeting here on Tuesday.

        Earlier, chief of fiscal affairs of the Ministry of Finance Anggito Abimayu said the macro assumptions in the 2009 state budget would undergo major changes in line with the change in a number of macro-economic indicators.

        "There will be changes in the rupiah exchange rate and crude price. The rupiah exchange rate was previously set at Rp9,400 per US dollar in the state budget and the crude price at US$80 per barrel. These should be changed," he said adding that the depreciation of the rupiah against the US dollar would have an impact on the state budget deficit.

        However, Finance Minister Sri Mulayani said that despite the change in the posture of the 2009 state budget, the government would maintain expenditures for ministries and state institutions to make sure that they would be able to carry out their programs without interruption.

        "We should learn a lesson from the previous experience when we should delay expenditures until 3 to 6 months each time there was a change in the state budget, because it required a change in the list of development projects (DIPA), she said.

        As an example, the government would not change the Rp207 trillion budget it has allocated for the education sector, which is 20 percent of the 2009 state budget, even though it would constitute 21 percent of the new (revised) 2009 state budget.

        The change in the posture of the 2009 state budget has caused the Rp207 trillion allocation to account for 21 percent of the budget.

        "In this case, if the 20 percent requirement should be met based on the law on the 2009 state budget, the budget for education should be cut by Rp9 trillion. But we have decided not to lower it," the minister said.

        The government is changing the 2009 state budget posture in connection with the change in a number of macro-economic indicators due to global and national economic conditions.

        The 2009 state budget undergoes a change as the government altered assumptions in the country's economic growth, oil prices and the rupiah exchange rate against the US dollar. However, assumptions on inflation, bank Indonesia (BI)'s benchmark interest rate and oil lifting remained unchanged.

        The change in the assumptions of macro-economic indicators brought major impacts to the state revenues and expenditures. "State revenues are estimated to undergo a decline by Rp128 trillion from Rp985.7 trillion to Rp857.7 trillion.

        This is due to lower economic growth, change in the rupiah exchange rate and incentives that the government would provide," the minister said.

        Tax revenues will also decline by Rp54 trillion from Rp725 trillion to Rp671 trillion. While non-tax revenues will become Rp74.51 trillion due to the change in the fuel oil prices and the rupiah exchange rate as well as the decline in state-owned dividends.

        With regard to the government's plan to lower fuel oil prices on January 15, 2009, Anggito Abimayu said that the government will no longer provide a subsidy for premium gasoline though its price is to be lowered further from Rp5,000 per liter to Rp4,500 per liter.

        "The government no longer provides a subsidy for premium gasoline. The fuel oils which are still receiving subsidies from the government are diesel oil and kerosene," Abimayu said here on Tuesday.

        The lowering of the diesel oil price and its subsidy were a policy to provide a stimulus to households and the business world. With the lowering of the diesel oil price, it was possible for the electricity tariff to be lowered so that it would provide a stimulus for the business world and households.

        "So, there will be three kinds of stimuli, namely stimuli for households, for businesses and for infrastructure which is expected to create job opportunities," he said.

        Abimayu said that with the lowering of fuel oil prices, fuel oil subsidy expenditure in 2009 would be lower than the estimate in the state budget at Rp54 trillion. (T.A014/HNG/A/H-YH) 13-01-2009 23:53:50